In truth, Greece does have an alternative. Instead of submitting to the ferocious and pro-cyclical conditionality imposed by Germany and the IMF—cutting its budget deficit by 11 percentage points over three years in return for a €120bn loan—it could follow the Argentinean example of 2001-02 and default on the bulk of its sovereign debt. This would mean abandoning the euro, introducing a ‘new drachma’ and probably devaluing by 50% or more.
Some weeks ago, I had a private exchange about this scenario with an influential economist at the Center for Economic Policy and Research in Washington. He favoured considering an Argentine-style default option; I did not. But given Ms Merkel’s politically-motivated foot-dragging, the failure of the ECB to deal with the problem at an earlier stage and the strongly pro-cyclical nature of the cuts required, I am having second thoughts.
Eight years ago, Argentina defaulted on the major part of its sovereign debt and survived quite well. Many economists predicted that Argentina’s debt default would result in currency collapse, hyperinflation and even greater economic contraction than it had endured during its 1999-2002 recession. Instead, after the 2001-02 debt default and subsequent devaluation against the dollar (from 1:1 to 3:1), GDP grew at over 8% per annum over the period 2003-2007 and annual inflation fell from over 10% per month in early 2002 to less than 10% per annum over the recovery period. By 2005, Argentina had sufficient reserves to allow President Kirschner to pay off its remaining $9.8bn loan from the IMF in full and discontinue its programme with them.
European leaders would do well to read up on the Asian, Russian and Latin American financial crises of 1997-2002. The Nobel laureate Joseph Stiglitz famously published a open letter citing his reasons for resigning from his post of Chief Economist at the World Bank. Amongst his other criticisms of the Bank and the IMF was their imposition of drastic deflationary measures on Thailand and Korea in 1997, and on Russia in 1998, mainly to protect the balance sheets of private Western banks. The conditionality imposed was paid for dearly by cuts in economic and social expenditure imposed on ordinary citizens. In Greece—however corrupts some of its politicians—much the same is happening. The average Greek is being asked by the EU-IMF to tolerate vicious cuts mainly so that German (and other EU) banks won’t have to take a ‘haircut’.
A central lesson of all this is that unless protective action is taken early, a country can rapidly be overpowered by the financial markets. Once traders start betting against a country’s bonds or its currency, the herd instinct takes over. Greece’s budget deficit is not particularly high by world standards; 13.6% versus 11% in the UK, and 12.3% in the USA, but traders perceived its sovereign debt structure as too risky and prophecies of doom became self-fulfilling.
There is a further problem, too. The spending cuts needed to meet the government’s deficit target will undermine Greek government revenues. As an economist at London-based Capital Economics put it., “The key risk to its target is that deeper recession will lead to lower tax revenues, offsetting some of the savings that the Government expects to make as a result of its fiscal tightening,” In short, even though the bailout package has been agreed, the cuts may prove counter-productive and Greek recovery is far from assured.
The ECB could have nipped this crisis in the bud several months ago, both by continuing to accept Greek government bonds as collateral and by quantitative easing. Although the ECB had used quantitative easing to bail out the EU banking system, it refused to the same for Greece. There are clear signs that contagion is spreading to Portugal, and possibly to Spain and Italy. Can the ECB really be counted upon in future to prevent the gradual unravelling of the euro?
As the French economist Jean-Pierre Fitoussi argued in a recent interview in Libération, even if the Greek crisis is successfully contained for a time by an EU-IMF package, the financial markets will hope to profit by squeezing other European countries. Meanwhile, ordinary Greeks are taking to the streets to protest against further draconian austerity measures while the EU’s political class continues to focus entirely on its narrow domestic interests?
Europeans need to recall that we are really paying for the spill-over into the real economy of the 2008 bank bailout. Most important, only a few voices have begun to question seriously whether placating the financial markets by means of drastic cuts is unavoidable. Perhaps it’s time to start thinking the unthinkable, namely, that financial markets should be our servants, not our masters.
(For an earlier version see: http://www.guardian.co.uk/commentisfree/2010/may/02/greece-default-debt-choice)
#1 by h on May 5, 2010 - 2:34 pm
Argentina is experiencing a 35% inflation rate and is surviving by issuing mountains of money.
Argentina defualt was motivated by the criminal way of life of this desperate country.
Argentina refuse to repay international bondholders and has 50B in reserves and a GDP-debt ratio of 50%, refuses to comply with IMF about public balance controls.
Argentina after the default in 2001 never went for some kind of control against tax evasion and corruption, the real reason for the collapse.
Last year only 25 B$ escaped from the country, the croonies are profiting alot.
What else?
#2 by Ivor Ulteur on May 6, 2010 - 3:04 pm
Much of the western world is inmassive debt; what happens if they all default?
#3 by Michael on May 7, 2010 - 9:43 am
If companies and countries who cannot pay their debt do not default, then the banks who lent recklessly to them won’t learn anything. Greece should be let default, just like the Irish government should have let Anglo Irish Bank default. The reason neither were let default is because of the huge quantities of money they have borrowed from German banks. A lot of German’s are asking why they should bail out Greece, but maybe a more appropriate question is why should the Greek tax payers bail out German banks.
#4 by German Bank on May 7, 2010 - 9:20 pm
>>why should the Greek tax payers bail out German banks.
Well, simply because it is the German banks’ money that the Greek have borrowed earlier and like every other debtor are supposed to give it back at the agreed point in time…
And of course it is not just (evil) banks – life insurances, pension funds, indivduals etc. are exposed as well.
#5 by blue monkey on May 8, 2010 - 4:32 am
Greece and Spain won’t pay back. The only thing Germans can do is:
REPOSES 170 Leopard 2AEX Battle Tanks from Greece, and 190 Leopard 2A6E Battle Tanks from Spain.
U.S.A must REPOSES 170 F-16 Jet Fighters from Greece, … the rest is gone with the wind …forever …
Greece must stop paying lucrative pensions with borrowed money, reform the free health care system, and cut down, 4 times the military budged.
#6 by Michael on May 8, 2010 - 10:56 am
>>And of course it is not just (evil) banks – life insurances, pension funds, indivduals etc. are exposed as well.
While its very sad that this will damage people pensions, it does not excuse reckless lending. It takes 2 to tango. People who borrow should expect that they can pay back what they borrow and people that lend should expect that they will get it back. When a situation arises where the money cannot be paid back then both the borrower and the lender have to feel the pain.
What the bailouts are designed for are to shield the lender from the pain by lending more money to repay what is current debts.
This is complete madness and it is all going to implode in the end.
It is time for the ECB to start printing money and for all of Europe to share the pain, and some sort of regulations have to be put in place to curb cross border lending. If banks in one country do not have enough borrowers to make themselves viable, then tough luck.
#7 by blue monkey on May 9, 2010 - 3:13 am
Greece and Spain won’t pay back. The only thing Germans can do is:
REPOSSESS 170 Leopard 2AEX Battle Tanks from Greece, and 190 Leopard 2A6E Battle Tanks from Spain.
U.S.A must REPOSSESS 170 F-16 Jet Fighters from Greece, … the rest is gone with the wind …forever …
Greece must stop paying lucrative pensions with borrowed money, reform the free health care system, and cut down, 4 times the military budged.
#8 by andrei on May 11, 2010 - 2:47 pm
yes bluemonkey i agree with you. it is an issue that was not discussed much, but that i find important. greece invested much in army, keeps compulsory military service and treats minorities as it is war-time, not peace-time.
i understand that defence is member-states policy, but if eu bails out greece this roughly it should put conditions to cut massively from military expenses.
#9 by Spartacus on May 13, 2010 - 11:57 am
Greece does not treat minorities like it’s war-time. Everyone has the right to express themselves as they please in Greece and minorities are no exception. You should see how other neighbouring nations treat the Greek minorities living in their territories and then we can have a talk about mistreatment.
I think it is self-evident that the Greek people wish they could somehow get rid of the stupendous military expenses. Does anyone really believe that Greece is a militaristic nation which spends this much due to a paranoid war addiction or something like that? Nothing could be farther from the truth and if anyone is having such thoughts, they are obviously totally oblivious of the geopolitical situation in Southeast Europe and most certainly have missed their history classes. Actually, there is another nation in the area which fits perfectly to that description and this is really were it all starts for Greece.
The military is undeniably a tremendous and totally unfair burden for this country. Most Europeans don’t realize (and that is really sad) that the basic reason for Greece wanting so desperately to enter the EU in the first place was not to wear “fancy clothes”, but to get rid of a terrible, one-thousand-year old nightmare, as the emerging power of united Europe was believed to provide rock-solid guarantee for Greece’s territorial sovereignty.
In the case of Greece, the so-called “European solidarity” was translated into loans and more loans, which transformed into debt and more debt for Greece and profit and more profit for some private banks, when what was really needed on behalf of the EU was just a simple declaration: “Greece is part of the EU and any hostility against it will not be tolerated and will be answered immediately”. How many words is that? That’s 20 words. Instead of 20 words, Greece got 200 billion €, the ruling Greek elite started wearing “fancier clothes” than before and a vicious circle was started… Nothing more, nothing less. The Greek people wanted no money. The Greek people needed no money and the fact is that the vast majority of the Greek people really got no money whatsoever, apart from the ruling minority. Such a declaration on behalf of the EU as stated above would also be beneficial for the “opposing” side as well, as they would have no other choice but to give up on their plans for military expansion in the West and cut down on their military expenses as well, at least as far as their western border with EU (Greece) is concerned. This simple declaration would constitute the greatest act of solidarity on behalf of the other European nations towards Greece. Not the money. These loans are not solidarity. They are slavery enforcement through debt.
The average Greeks envisioned a modern version of the “Panx Romana” when they crossed the doorsteps of the EU, which was more than enough for them in order to unleash their creativity, having been liberated from the everlasting threat in the East and their worst fears for the first time after one thousand years of oppression, constant warfare and military occupation.
Unfortunately, this was not the case, as Greece still has to bear this cross alone, even today, which practically means even more debt for Greece (and the “opposing” side as well) and even more profit for the banks who lend to Greece (and to the “opposing” side as well). The circle never ends…
Portugal, Denmark, Belgium, Spain and almost every other nation of the EU practically need no army at all, while it is crucial for Greece to pay annually about 50% of its GDP or even more for military expenses. On top of that there are the tidal waves of immigrants constantly arriving from the East in uncontrollable numbers and it was not until very recently that the EU started to realize the agonizing extent of this problem, when Frontex started sending their reports to Brussels from their first operations in Greece.
This is severe madness. This scheme mathematically leads Greece to even more economic depression, social uprising and most importantly, to the humiliation of a whole nation before its partners in the EU, no matter what the ECB and the IMF plan to do next. In other words, this plan is Greece’s utter destruction.
How could anyone ask of Greece to hold out for much long?
That’s an easy question: they can’t really…
However, it is evident that the Greek people also have deep responsibility in this as well, as they are the ones having voted for a series of the most useless and corrupted administrations the civilized world has ever seen from 1990 until the present day.
In addition, it is also true that no one forced the Greek administrations to borrow money from the private banks. They did that deliberately, on their own “free will”, always in the name of “economic growth” and one day they started wearing their brand new, fancier clothes.
Contrarily than what is hyped about, Greeks are actually very resourceful, creative and hard working people and they get paid less than the average European. About 80% or even more of young Greeks are University graduates with Master’s degrees, all of them are capable English speakers and most of them speak other languages as well.
In the so-called “good days” before the financial meltdown, a typical Greek of such a profile working in the private sector, would work for about 10 hours a day, 5 days a week and numerous extra-hours and weekends and would earn around 14,000 € to 16,000 € per year. Today, and after the austerity measures, this has shrunk down to 12,000 € and 14,000 €, respectively. And of course this kind of working conditions is considered as a “real catch” or a privileged situation, for the majority of people are struggling to survive with 8400 € or even with 6000 € per year, not to mention the unemployed. This is the “lost generation” of the young Greeks aged 25 to 35 which cannot support a family and therefore prefer to stay single and have no children at all. After all, this is no world for new children to come, and thus a new type of “genocide” is introduced…
After 40 years of hard work, a typical Greek can get a pension of around 12,000 € a year and feel privileged, while there are elderly Greeks who will now have to get by with the mind-blowing sum of 4,320 € a year! It should also be noted that the cost of living in Greece is above the European average.
Those greedy Greeks…
Well, maybe Greeks aren’t that greedy after all, at least the vast majority of them. In contrast, there is a huge scandal these days in Greece as some ministers of former administrations were found guilty of corruption and one of them was found to own 50 million €, a house in Monte Carlo and a villa outside Paris…
The Greek people don’t want to owe to anyone. Who does? They have pride, they are not beggars, liars and thieves like the majority of their incompetent political leaders and even though they are not the ones who actually created the debt they want their country to be cleansed and get credible again as soon as possible. However, they will not tolerate to become the test subjects of international market experiments and they will not accept any form of exploitation, as this is a nation we are talking about, not a corporation which can be flushed down the toilet, and it is a fundamental right that a nation be allowed to survive and defend itself. If any of the above occurs, or the nation struggles, it will have to restructure and postpone the payment procedures until it is in the position to continue as scheduled.
The present riots are the combined result of the anger against the inefficiency of the political system and the lack of true democracy, the betrayal and the lies of the majority of the politicians who set up a luxurious feast for them and their close friends for over a decade, the unprecedented cruelty of the measures which were taken, and last but not least, the protest against the false world monetary system which is a huge fraud and must be abolished at all costs as it mathematically leads to world debt slavery.
Even so, the economic situation of this country would be quite different if it weren’t for the military expenses. The figures speak for themselves. Greece wouldn’t be in this condition and the markets would have picked Portugal, or Spain, or Italy, or Ireland and Iceland again to play with. For that is what they do. They play with nations as if this is a horse race. And they bet on the weakest horse to fall.
However, what really matters here is not who they are betting on to fall right now. What matters is that tomorrow they will be betting on someone else and that country will fall just like Greece. And don’t be fooled, they will try to do that to everyone, country by country, until everyone falls. And you have to take into serious consideration that the same thing will most probably happen to you too. Your country may be next. When the weakest is out, there is another weak waiting to fall…
All western countries have huge debts which are constantly increasing and cannot be paid back, eventually leading to bankruptcy. No matter how “wealthy” you think your country is. This is because of the nature of the monetary system and the effect of the application of interest rates, as the money owed to a bank is always more than the money lent by the bank, which means that not all borrowers can repay their debt and someone will always have to go bankrupt at each round. Greece is too small of an economy for the debt monster to satisfy its hunger. Citizens of Europe prepare yourselves. The game has just started and Greece was just a warm-up.
However, the most dangerous thing of all I have heard in this chaotic economic mess we are all in and is worth noting is that there are some people out there who blame Greece for this mess not because of the potential domino effect of the Greek debt, but because Greece introduced this dreadful thing called democracy, as they say it is totally incompatible with the management practices in the free market economy and that’s why the system is failing today. This is very serious and must be addressed on the spot.
What I have to answer to these people is that this thing called democracy today has nothing to do with the term democracy as Greece introduced it. Democracy in Greek is “Δημοκρατία” which is formed by combining the words “κράτος”, which means state and “δήμος” which means people and literally means “the state to the people”. There is no state in the world today which is literally governed by its people like ancient Athens, where all people in the state voted directly for policies and not for politicians, so the term democracy is actually misused today. On the contrary, almost all democratic nations today (including Greece) use a system which is called “representative democracy”, which is actually a form of elective oligarchy as the word oligarchy is “ολιγαρχία” in Greek and literally means “the rule of the few”. True Democracy is when all the people in the state decide directly for the formulation of state policies and not via their representatives. Even so, the democratic nations of today incorporate some kind of democracy in their political systems and that’s why we say that there is a lack of real democracy to the world today instead of saying that democracy is totally absent. In plain words, the more power to the people, the more democratic our world becomes. Hold that and compare it to the argument that “democracy is to blame for the world failing today” and the emerging conclusion is that if a crippled democracy “is incompatible with the management practices in the free market economy”, imagine how incompatible a true democracy is with these so-called “management practices” and you’ll get the picture.
As far as the free market economy is concerned, there is no such thing as a free market when large corporations can easily wipe out small businesses and form monopolies. World economy today is called “highly competitive market economy” and has actually nothing to do with the free market economy. Lastly and more importantly, the system that is really failing today is our inflationary monetary system with its interest rates which is causing the whole world to collapse and needs to be immediately replaced.
Greece now faces one of the most horrific nightmares it has ever been confronted with in its 4,000 years of historical continuance (and it has seen a lot of them in this time), however, the most unbearable burden for all of us modern Greeks, which is a blessing and a curse at the same time, is not the ECB or the IMF, but the constantly felt intolerable notion that we are the unworthy descendants of our glorious ancestors…
#10 by blue monkey on May 16, 2010 - 2:43 am
Greece and Spain won’t pay back. This was a calculated Risk, and a Lesson for the Banking System. What is happening in Greece, is a very well orchestrated show, to get granted €110bn aid, to avert meltdown. A new deception compared with the old Trojan Horse. The only thing Germans can do is:
REPOSSESS 170 Leopard 2AEX Battle Tanks from Greece, and 190 Leopard 2A6E Battle Tanks from Spain.
U.S.A must REPOSSESS 170 F-16 Jet Fighters from Greece, … the rest is gone with the wind …forever …
Greece must stop paying lucrative pensions with borrowed money, reform the free health care system, and cut down, 4 times the military budged.
Greece’s problem is too much debt. Greece has a budget deficit of 12.7% of GDP – meaning that the country is spending 12.7% more than the value of one year’s economic output.
Greece is no different to a serial credit card borrower who can’t pay back his loans. But just like a serial credit card borrower, as long as Greece keeps relying on borrowed money to fund itself, the problem won’t go away. It will just get worse.
http://www.defenseindustrydaily.com/Greece-in-Default-on-U-214-Submarine-Order-05801/
But don’t worry; the ECB, the Fed or both will print the money.
And all of us will share the pain, with our hard-earned money.
Bad is never good until worse happens.
#11 by Spartacus on May 17, 2010 - 5:11 am
@blue monkey:
It is inevitable that Greece and Spain (and most of the other EU members, if I might add) won’t be able to pay their debt in the long run. The debt will keep increasing, no matter the drastic budget cuts and the harsh austerity measures. Our so-called “Banking system” will see to that. Please have a look at my previous post and you’ll get the real picture. I know it’s a terribly long post but it’s worth a read.
Dear Sir, I reassure you that Greece would be very happy if she really had the option to totally abolish her army. Unfortunately, it’s not as simple as that. It’s a matter of life and death for Greece. The army is the only guarantee of sovereignty for Greece, for the time the Greek army gets disbanded, Greece will be no more. And Greeks have gone through too much pain, sorrow and devastation in order to be in the position to defend their right to exist.
I totally agree with you that Greece wouldn’t be in this situation if it weren’t for the paranoid military expenses. But Greece is not addicted to war, nor is she paranoid. Doesn’t this mean that there is something fishy going on here? Greece is a small country which wants to live in peace and most certainly would be totally overwhelmed if the U.N., the U.S.A., or the E.U., as major world “peace-keepers” could actually guarantee world peace, as this would save her from the trouble of having to support an army of her own and stop this economic bleeding, which is the main cause for Greece’s huge debt. As long as the major “peace-keepers” don’t do their job right, Greece has very limited options and today most of these options have already been exhausted to their limits. In this context, Greece cannot hold on for much longer.
Contrarily than what you may have heard, Greeks don’t live in luxury. There only was one Onasses, not many, and he died long ago. 95% of the Greeks gets paid way below the European average for doing the same job. And this is the main reason for most of young educated Greeks fleeing abroad in search of a better tomorrow.
As far as the pensions are concerned, I will only ask you this: is 12,000 € a year considered as a lucrative pension? Because that is what my father got after 55 years of hard work.
That being said, the U.S. can have their military toys back if they want to. Germany still owes compensations for the devastation caused to Greece during WWII (Greece was utterly destroyed, while when the Nazis left the country in 1945, they took all of the Greek gold reserves with them), so if Germany wants to be paid, they should be the first ones to pay everything back and return the gold, plus a 65-year interest on everything and that still wouldn’t be enough, as that wouldn’t bring back the dead…
Whatever the case may be, Greece would be more than happy to give away all of her military toys if she knew that this would save her from the trouble of having to fight wars she didn’t want to…
#12 by Elena on May 18, 2010 - 10:25 am
Spartacus, I absolutely applaud you. Your post was one of the finest I have read in the last year. Your post is full of truth. Once again I congratulate you and wish this post could be posted somewhere for many to see.
The absolute garbage I have read on the internet in the last months is appalling to say the least. The criticism that the Greek people have gotten is tragic.
Responses from people that have absolutely no idea what the real conditions in Greece are just beyond ridiculous. People are giving opinions as if they KNOW what they are talking about when they KNOW NOTHING. We have been called greedy, lazy and every name under the sun. I wonder if the people that sit on their computers and type out the garbage they type could live on 14 months salary which total approximately to 12,000 euros PER YEAR, I wonder if they could provide food, shelter, heating, warm clothes etc for their family of 3, 4 or 5 people ?? I bet you they couldnt but Im proud to say that we Greeks even under these dismal condition ARE TRYING VERY HARD AND OMITTING SO MANY THINGS TO BE ABLE TO FEED OUR FAMILIES BUT BY THE GRACE OF GAD WE ARE SUCCEEDING BARELY, how much are the *posters* here that are criticizing us so called greedy and lazy Greeks paying for NECESSITIES LIKE MILK AND BREAD ??? what is your salary per year ? and then you people have the audacity to criticize.
How dare you type garbage that you have no knowledge of, how dare you criticize anything about us normal average hardworking, tax paying Greeks, WHEN YOU HAVE WALKED A MILE IN OUR SHOES, then you earn the right to judge not a second before.
Elena
#13 by Elena on May 18, 2010 - 10:28 am
#14 by Elena on May 18, 2010 - 10:33 am
Sorry I quoted myself thinking I could edit and have no idea how to delete.
#15 by Anonymous on May 18, 2010 - 4:51 pm
Elena,
Africans are poorer than you Greeks by far. Yet I don’t see them complaining as much. And I don’t see billions of bail-out money thrown in Africa, India or any other place in the world where people REALLY need it to survive, unlike Greece.
“tax paying Greeks”?!? Are you having a laugh??? That’s an oxymoron if I’ve ever seen one.
What you need to be doing instead of complaining is start taking things seriously. For instance, I can’t help noticing that Greece be the only country where civil servants are paid 14 salaries a year. Furthermore, I find it striking that retirement age is set so low despite all productivity problems. Are you people insane?? Do you really expect the rest of us to support your lazy way of life?
Oh, and you find the 14 salaries you get insufficient?! Fair enough. You want higher salaries? Fine! WORK HARDER!! Like the rest of us do. This ain’t communism and if you don’t earn it, you won’t get it!
Scrap those salaries you don’t deserve and increase retirement age for a start! That ought to fill up a few budget holes. And start paying taxes for a change! Cause me and millions like me sure as hell won’t do it for you!
Once your over that, you can move on to laying off civil servants and promoting entrepreneurship among the population. Trust an honest supporter, that’s the only possible way to increase productivity in the long term. Elseways, off you go with Turkey into the Arab world.
Best of luck to you
#16 by Spartacus on May 22, 2010 - 12:06 am
@ Elena:
Thank you for your kind words. I just thought that someone ought to present the situation as it really is. And as they say, “if you want something done correctly, you have to do it yourself”.
I reprocessed the post I made here and I emailed it to all of my contacts so that they can forward it to the 4 corners of Europe…
@anonymous:
You obviously have not read my first post. I know it’s long, but it is very important that you read it carefully. All of it! Then you can cast your criticism on those insane, greedy, lazy Greeks…
Civil servants are paid 14 salaries no more my friend… They are paid 12 salaries just like the rest of the other Europeans. Not that the number of salaries per year is of any significance. As you are no doubt aware, what matters is the number of euros we earn per year… This was the lowest in the EU and has shrunk even more due to the austerity measures, as the 13th and the 14th salary exist no more…
You work hard you say and you don’t support our “lazy way of life”. How “hard” do you think you work? You are severely mistaken if you think that you work harder than the average Greek. What if the average Greek is working harder than you and earns half of your salary? You obviously haven’t given any thought on that possibility, have you?
I know, it is more convenient the other way…
And while it is true that there was a significant number of civil servants in Greece who were lazy as you call them, they were not the majority of the civil servants and they surely were not the majority of the Greek people.
Please have a look at my first post. It may help you see things as they really are.
You cannot imagine how offensive and unfair your words are to the majority of the Greeks. What you write may have some truth in it (e.g. the tax evasion argument), however it is not the whole picture and that does not do justice.
It is true that this tax evasion thing is retarded, and I was thinking exactly the same before all of this have started to happen. I was hoping that this situation would change one day and now, this day has come, even though I hadn’t imagined it would come like this… Nevertheless, Greece now has already done or is in the process of doing way more than it is needed in order to get out of this mess.
However, the big problem is not solved. Thanks to her beloved, peaceful neighbor, Greece’s main problem is the dreaded armament program. If it weren’t for that, things would be quite different for Greece. I can’t help but to say it again: read my first post!
I assure you that whatever I have written is totally true.
I’m sorry to burst your bubble, but all this talk about entrepreneurship promotion and productivity increase is based on the false assumption that we operate in a free market economy. If you substitute the term entrepreneurship with the term corporatocracy, every time you hear it, than everything will gradually be made clearer, day by day…
As for the free market economy? Again I say, read my first post! All that matters in the “highly competitive market economy” which governs our world today, is that corporatocracy (like aristocracy…) maximize their profits no matter the human cost. Do you think that you are competitive my friend? Tell that to all those hard-working labour workers who have lost their jobs because of robots.
Do you work harder than them?
I don’t think so….
Of course that doesn’t mean that technology is bad. It only means that it is used badly… The corporatocracy’s point of view is that our world is run by profit maximization. Maybe this is news to you, but the world is run by people. Not by that thing called financial profit.
As far as retirement is concerned, I challenge you to give me just one scientific reference which clearly shows an analogous mathematical relationship between human productivity and human age and I will rest my case.
How naive (or convenient…) is to think that your salary being greater than mine is justified because “you work harder” than me. How tragic that is… Or should I call it pathetic? Do you think that you work harder than an Ethiopian? Based on your logic, if the Greeks are greedy, lazy and insane than the Ethiopians really cannot fit into any of these categories, as they would constitute a new category of lame people on their own.
Well, tell that to an Ethiopian and let’s see what he has to say about your point of view…
And lastly, my friend, it is at least insolent on behalf of all people living in western countries to say that “Africans are poorer than you Greeks by far. Yet I don’t see them complaining as much”.
Let’s leave Africa out of this mess. Africa doesn’t complain, because Africa saves every breath there is in order to survive. Africa has no energy to waste into complaints… Fortunately, Greece still has some energy left into her and she will make damn good use of it. Be sure of that…
You don’t really believe that Ethiopia’s problems are due to laziness too, now, do you…
Best of luck to all of us
#17 by Andrew T on May 23, 2010 - 1:20 pm
Europe has focussed most of its energies on budgetary constraints and debt management. One of the striking things to me – and a key contrast to Britain or America – is the lack of confidence the Greeks seem to have in their political system.
Maybe Europe needs to be pushing more on this – political reform and greater accountability for corrupt politicians. That way ordinary Greeks would be more sympathetic to calls for restraint.
#18 by Anonymous on May 23, 2010 - 4:01 pm
Spartacus has written: “You work hard you say and you don’t support our “lazy way of life”. How “hard” do you think you work? You are severely mistaken if you think that you work harder than the average Greek. What if the average Greek is working harder than you and earns half of your salary? You obviously haven’t given any thought on that possibility, have you?”
If Greeks work as hard and don’t earn as plenty as others, it regretfully means they are incompetent. Nothing more, nothing less. It doesn’t however AT ALL mean that the rest of us should give away our hard earned money on Greek incompetence. Should we start doing that, the system we live in becomes communist. Now, I know you Greeks would love that, but it simply AIN’T GONNA HAPPEN in Europe.
You’re obviously a convinced communist my dear friend. Mark my words, there is no place in Europe for those. And should the majority of Greeks be like you – I should hope not – you’ll be out of Europe sooner than you think. And off to make friends with other extremists, left or right wing. The Arabs seem to be the closest geographically. If you fancy that – be my guest. Otherwise, you must embrace the free market and democracy. What you call “Corporatocracy” is just a fancy word communists use to describe the free market.
As to your earlier post. I’ve read it, and I’ve got to say – Turks aren’t your enemies. You try to make us believe that they are so that the rest of us can pity you and flood you in cash. The reality is that both Greece and Turkey are NATO members are sure as hell won’t go to war against each other. The Yanks won’t allow it for one.
And one more thing. Whoever said that Greece introduced democracy? One must be barking mad to even contemplate such a thing. Ancient Athens was a society based on slave labour. Doesn’t sound too democratic, does it? A democracy is a political system that allows for free and fair elections with universal suffrage. Slaves weren’t allowed to vote in Ancient Athens? Or were they? You tell me, your Greek.
#19 by Angela on May 23, 2010 - 4:59 pm
You really don’t know what you are talking about, do you?
On those “salaries (the Greeks) don’t deserve”:
“One in three Greeks does not have access to basic food and clothing, as Greece is home to the second-largest population of poor people in the European Union, on a relative basis.
Nearly 23 percent of Greeks live below the poverty line, ranking Greece in second place on the EU’s list of poorest populations. Portugal has top spot.
The minimum monthly salary paid for unskilled work in Greece is 626 euros versus an EU average of 1,160 euros.”
http://www.ekathimerini.com/4dcgi/_w_articles_politics_1_28/03/2008_94846
http://livingingreece.gr/2008/04/04/minimum-monthly-salaries-of-eu-countries/
——-
On the Greek “lazy way of life”:
“The Greek labor force totals 4.9 million, and it is the second most industrious between OECD countries, after South Korea. The Groningen Growth & Development Centre has published a poll revealing that between 1995 and 2005, Greece was the country with the largest work/hour ratio among European nations; Greeks worked an average of 1,900 hours per year, followed by the Spanish (average of 1,800 hours/year).”
http://en.wikipedia.org/wiki/Economy_of_Greece
——–
On the “low” Greek retirement age:
https://community.oecd.org/community/factblog/blog/2010/02/03/keep-on-working
This shows the *actual* average retirement age by country – Greece is above the European average at 61.5 years.
——–
On all those Greek civil servants that “should be laid off”:
http://www.oecd.org/document/33/0,3343,en_2649_33735_43714657_1_1_1_1,00.html#countrynotes
This shows that Greece’s public sector workforce is 14.1% of it total labour force, lower than the European average, close to that of the USA (14%) and lower than that of the UK (around 20%).
——–
On “promoting entrepreneurship”, the supposed solution to all of Greece’s problems:
“You cannot graft rich-world policy onto emerging markets. Conservative fiscal and monetary policy–by which I mean reasonable deficits and low inflation, not “conservative” policy in the American sense–emerges from the social and political institutions of a country; it cannot be imposed. Countries frequently try to borrow the benefits of these policies by tying their policies to those of some more creditworthy nation, but these efforts generally seem to end in tears unless the country already has a pretty high level of institutional support for this sort of fiscal and monetary policy–at which point, the currency unions and dollar pegs and so forth aren’t so necessary. I used to be a fan of dollar pegs and other attempts to make a credible commitment to fiscal rectitude, but after Greece and Argentina, the scales have fallen from my eyes…”
http://www.theatlantic.com/business/archive/2010/05/the-lessons-of-greece/56544/
Note that the above is coming from an economic libertarian.
——–
To conclude, your comments are ignorant and superficial. If you want to learn more about Greece and understand why it is in the position it is today (and I’m talking about a more sophisticated explanation than “those greedy lazy Greeks”), try reading a lot (history, politics and economics of Greece for a start) and reflecting on what you’ve read even more.
Best of luck to you.
#20 by Angela on May 23, 2010 - 5:01 pm
@Anonymous
You really don’t know what you are talking about, do you?
On those “salaries (the Greeks) don’t deserve”:
“One in three Greeks does not have access to basic food and clothing, as Greece is home to the second-largest population of poor people in the European Union, on a relative basis.
Nearly 23 percent of Greeks live below the poverty line, ranking Greece in second place on the EU’s list of poorest populations. Portugal has top spot.
The minimum monthly salary paid for unskilled work in Greece is 626 euros versus an EU average of 1,160 euros.”
http://www.ekathimerini.com/4dcgi/_w_articles_politics_1_28/03/2008_94846
http://livingingreece.gr/2008/04/04/minimum-monthly-salaries-of-eu-countries/
——-
On the Greek “lazy way of life”:
“The Greek labor force totals 4.9 million, and it is the second most industrious between OECD countries, after South Korea. The Groningen Growth & Development Centre has published a poll revealing that between 1995 and 2005, Greece was the country with the largest work/hour ratio among European nations; Greeks worked an average of 1,900 hours per year, followed by the Spanish (average of 1,800 hours/year).”
http://en.wikipedia.org/wiki/Economy_of_Greece
——–
On the “low” Greek retirement age:
https://community.oecd.org/community/factblog/blog/2010/02/03/keep-on-working
This shows the *actual* average retirement age by country – Greece is above the European average at 61.5 years.
——–
On all those Greek civil servants that “should be laid off”:
http://www.oecd.org/document/33/0,3343,en_2649_33735_43714657_1_1_1_1,00.html#countrynotes
This shows that Greece’s public sector workforce is 14.1% of it total labour force, lower than the European average, close to that of the USA (14%) and lower than that of the UK (around 20%).
——–
On “promoting entrepreneurship”, the supposed solution to all of Greece’s problems:
“You cannot graft rich-world policy onto emerging markets. Conservative fiscal and monetary policy–by which I mean reasonable deficits and low inflation, not “conservative” policy in the American sense–emerges from the social and political institutions of a country; it cannot be imposed. Countries frequently try to borrow the benefits of these policies by tying their policies to those of some more creditworthy nation, but these efforts generally seem to end in tears unless the country already has a pretty high level of institutional support for this sort of fiscal and monetary policy–at which point, the currency unions and dollar pegs and so forth aren’t so necessary. I used to be a fan of dollar pegs and other attempts to make a credible commitment to fiscal rectitude, but after Greece and Argentina, the scales have fallen from my eyes…”
http://www.theatlantic.com/business/archive/2010/05/the-lessons-of-greece/56544/
Note that the above is coming from an economic libertarian.
——–
To conclude, your comments are ignorant and superficial. If you want to learn more about Greece and understand why it is in the position it is today (and I’m talking about a more sophisticated explanation than “those greedy lazy Greeks”), try reading a lot (history, politics and economics of Greece for a start) and reflecting on what you’ve read even more.
Best of luck to you.
#21 by Spartacus on May 25, 2010 - 5:44 pm
I sure hope that the Yanks will not allow a new Greek-Turkish war. But, I’m not confident about that. History has shown otherwise. What about the Turkish invasion in Cyprus, back in 1974? Greece and Turkey were supposed to be NATO “allies” back then…
The problem with Turkey is really really real (sadly that is). Now if you want to behave like an ostrich and refuse to see the problem as it is, than be my guest.
You are obviously oblivious of the historical past regarding the relations of these two nations. Firstly, you should study some more. Way more. Then you can be the judge of things you now do not know… Maybe you need to believe that America is still the righteous defender of the free world. I would like to believe that, too. It would be wonderful if this were true. Unfortunately, it seems that it’s not…
Why do you want to put labels on every person? You have marked me as a “convinced communist”, while this is not true. I have been called anarchist, marxist and communist by right wing extremists and I have been called fascist and nationalist by left wing extremists. So, what am I, really?
I am a free human being who believes in true democracy, evolution, progress and prosperity. My vision of the world is not a revived World Soviet Union, nor is it a fascist World Corporate Government. However, you surely sound as anti-communist, while I am both anti-communist and anti-fascist. “Παν μέτρον άριστον”, the great ancient Greek philosophers said, meaning that extremism never does good.
What happened to the land of the free and the home of the brave? When I was a child, I was dreaming about America. When I read about the American Revolution and the Declaration of Independence, that changed my life forever. America used to be THE model country for me. However, I have grown to realize that America has lost that sense of liberty and is now governed by corporatocracy. The American Fathers did not want that. In fact, they did everything in their power to ensure that America would never come to her present condition…
The American people have resisted, but eventually, they fell… I have no problem with the free market economy. The key is the word “free”. I am a liberal person. Why should I be opposed to that? The free market economy has worked wonderfully for years. It may not be perfect, but it works. The point is that we no longer operate in a free market economy, even though the media says that this is the free market economy we’re in…
As far as your paying the Greek debt is concerned, I assure you that the Greek people do not want that. We never wanted that. We asked the government for a referendum. We don’t want other people to pay for us. That’s humiliating and no one wants that. And unfortunately that is what is happening right now. The ECT and the IMF were introduced in the game in order to put some of the Greek debt burden on the backs of the other European nations, as if these nations do not have a huge debt burden of their own…
Most of us Greeks believe that we should leave the Euro and return to drachma as soon as possible, even if this means an additional 30% decrease of our buying power. This may sound as a catastrophe right now, but it would be beneficial in a long term basis, both for us and for the whole of Europe.
But the plan is that Greece be used to bring the whole EU down and until now it is working like a charm…
“If Greeks work as hard and don’t earn as plenty as others, it regretfully means they are incompetent”, you say.
Where in the world is this joke of an assumption based upon? What is the basis? I’m really curious to find out, if you would be so kind as to enlighten me…
Or, maybe it goes like this: “The Greeks must be idiots. If they say that they work hard but do not earn as much as we do, they are surely not productive, and/or they must be retarded or something like that. There is no other explanation”. Well, that thought is also very convenient for you…
Concerning your objection about the democracy in ancient Athens being depended on slavery in order to function, I can say that while you have a very good point on that and I agree with you, however, the same thing is actually happening today. Do you consider yourself as a free person? Well, you’re not. Only the politicians and the corporate elite are truly free. Unfortunately you were born into serfdom and someday you will bitterly realize it. Most African and South American nations already know this pretty damn well…
In this context, if democracy needs slaves in order for it to work efficiently (which is actually not true), then we can now have a true democracy, as the slaves we need are now highly available in the form of technological helpers. No fellow human being needs to live in slavery and poverty, but this will never happen if we continue to accept the fact that the world is governed by the corporate elite.
It is true that a true democracy demands very high standards of awareness by the citizens. It is true that this level of awareness cannot be achieved if the citizens are working for 10 hours a day and they are watching American Idol and other garbage like that on their non-existent free time. In this way, the citizens don’t get to have the knowledge required in order to participate in the decision making process and this “nominates” the truly free people, the “enlightened” elite, who have all the time in the world to reach higher levels of awareness, as they don’t work, to make all the decisions…
Have a look at the following links my dear friend. I suggest you watch everything carefully and then we can have a real talk. Right now, you most certainly lack certain pieces of information…
I’m sure that you will find them quite interesting…
1. Alex Jones #1:
http://www.youtube.com/watch?v=EnPzokFoAow&feature=player_embedded
2. Alex Jones #2:
http://www.youtube.com/watch?v=p9JsRYV_FlM&feature=player_embedded
3. “Money as debt”
http://vimeo.com/10521493
4. Zeigeist Final:
http://video.google.com/videoplay?docid=-7671298400447638082#docid=4573704334162675487
5. Zeitgeist II Addendum:
http://video.google.com/videoplay?docid=-7492068823950286254#
#22 by Spartacus on May 25, 2010 - 6:10 pm
I’m really sorry for the double post, but I wanted to report that the 3rd link to “Money as debt” I posted does not work. Here is a working link:
http://greece.creteisland.gr/index.php?option=com_content&view=article&id=195%3Amoney-as-debt-bank-system-the-today-crisis&catid=80%3Amovies&Itemid=40&lang=en
#23 by Anonymous on May 26, 2010 - 9:48 pm
Alex Jones is one of the biggest fruitcases out there. Boy, was I in for a laugh listening to him speaking. He’s a complete nutter ladies and gentlemen, as he likes to put it
Are these your arguments mate? Really funny. For a minute there I thought I’d been speaking to a serious interlocutor.
I’ll take a few minutes to comment on the only 2 points of your otherwise very long post.
““If Greeks work as hard and don’t earn as plenty as others, it regretfully means they are incompetent”, you say.
Where in the world is this joke of an assumption based upon? What is the basis? I’m really curious to find out, if you would be so kind as to enlighten me…”
Adam Smith was the first ever to explain how markets work. Supply and demand set quantity and more importantly for our case here – prices. Now, there’s this little thing called labour market. Price of labour (wage) is determined by it. So logically, if one does not earn enough on the labour market, one either doesn’t put enough working hours – i.e. is lazy – or does work hard enough but doesn’t get much because what one puts in isn’t worth enough – i.e. one is incompetent. Now, it was you who said Greeks work hard. I just added 2 and 2 and arrived at a conclusion that Greeks are incompetent on average.
“I sure hope that the Yanks will not allow a new Greek-Turkish war. But, I’m not confident about that. History has shown otherwise. What about the Turkish invasion in Cyprus, back in 1974? Greece and Turkey were supposed to be NATO “allies” back then…”
Aha!! Can’t fool me. Not as naive as you may think! It was Greece that tried to annex Cyprus first. Turkey went in only second. So try those cheep tricks on somebody else.
This be my last post in this thread. And if I may be so bold as to suggest, stop believing in ghosts and start taking work seriously.
#24 by Spartacus on May 28, 2010 - 8:09 pm
I wasn’t trying to fool you, or anyone else. And even if my interlocutor were truly naive, I would never try to manipulate them. I would just try to explain my arguments and back them up with facts.
Our difference is that “for one minute you thought I was a serious interlocutor” and you finally realized that I’m not, thereby declaring me a “ghost-hunter” who is unworthy of your time, while even though I discerned from the beginning that you were misinformed on certain matters (which makes you kind of naive, actually), I didn’t scorn you. I tried to present the facts and explain the situation, even if it seemed like a helpless situation…
I never look down on people my friend.
It’s out of my “Greek” nature…
As far as the Cyprus issue is concerned, you certainly lack the following pieces of information at the least:
1. There is not even one bit of Turkish land which wasn’t Greek once (of course Greece today doesn’t claim these lands – we only want to live in peace with what we have).
2. At the referendum of 1950, 95% of the Greek-Cypriots (which equals to 82% of the island’s total population) asked to be united with Greece (Cyprus is actually a Greek island just like Crete), but the British Empire replied: “No! Forget it! This is a British colony. This issue is considered as closed”. The Greek-Cypriots then formed EOKA, the liberation army of Cyprus against the British occupiers.
3. Turkey had never interfered in the issue of Cyprus until then, nor she had any legal jurisdiction or claim on Cyprus whatsoever, and Greece annexing Cyprus was considered to be the most natural thing to happen (even in Turkey) after the British would realize that their Imperial Age was over and that they had no right to occupy an island inhabited by Greeks (and not by Anglo-Saxons)…
4. What happened in 1974 on behalf of Greece was that the “Junta”, the military dictatorship which was imposed on the Greek nation with the support of the US, tried to provoke a military coup to Cyprus. The original plan was to divide the island in two and believe me, this plan was not Greek…
If you question my words, I will just tell you this: President Clinton himself acknowledged that the United States failed its “obligation to support democracy” when it backed Greek’s harsh military Junta during the Cold War.
There goes the “Yanks won’t allow a Greek-Turkish war” argument, and if you don’t believe me, search for yourself. The truth will strike you hard on the forehead…
I will not comment on your Adam Smith argument. Just watch “Money as debt”. This might widen your horizons.
There are many fruitcases out there, that’s for sure… Whether Alex Jones is one of them or not, only time can tell. I truly believe that even he would wish to be the biggest fruitcase out there, instead of actually being right about his claims…
#25 by GWI on May 30, 2010 - 3:09 pm
Angela and others:
Thank you for some excellent and constructive comments which has taken the discussion forward. It shows too that a few serious people still contribute to blogs.
Best/George
#26 by typhoon on June 30, 2011 - 6:27 pm
Blown away by Sparactus’ knwledge and in-depth wisdom… Thank God there are people like him willing to contribute and put up a JUST front and tell it as it really is… Well done on a superb contribution…
#27 by typhoon on June 30, 2011 - 6:39 pm
One more thing I would like to add here…. After paying taxes for the past 28 years…. We were hoping for a better tomororw after putting child through school/university (for a better tomorrow) only to be hit with wage reduction totalling at the present day, 7,000 Euros per annum… Big drop which is having a huge impact… But for a better tomorrow, I would willingly sacrifice that money, if I had the belief it woud not all have been in vain… At this moment in time, I feel that it will be in vain and we have no control over our future…. No one has that control over their future – we were the first, the rest will surely follow…. Down with the Banksters… Wake up people and stop living in your ridiculous bubble… Use whatever analogy you like, but I would say ‘get your heads out of the sand ostriches’ and get real about your situation… Greece today – who knows tomorrow!!!